Energy is changing to decentralised, consumer-led supply...

With non-commodity costs now well over half of a domestic or small business energy bill, the need to mitigate current and future cost rises is critical to C-level and key decision makers looking to run an efficient business.

Onsite / Self Generation

Despite recent pull backs on subsidies for renewable self-generation, ownership and control of an onsite electricity and/or heat generation asset remains a key long term goal of most businesses and home owners. By some estimates growth in distributed energy resources over the next five years is expected to surpass 15% year on year and top $600m by 2022 as consumers increasingly look to generate and/or procure energy as an IoT / technology-enabled drawdown service.

From onsite renewable generation, demand response and battery storage, through PPAs, FiTs and small scale LNG, ChangingEnergy can help you or your business take control, manage these costs and tap additional revenue streams from consumer-led or direct energy supply.

PPAs

Power Purchase Agreements (PPAs) are an alternative sourcing method of procuring energy directly or indirectly (sleeved) from an upstream energy generator. In most cases energy is imported, but PPA contract structures do exist for owners of onsite generation who may wish to sell back their own self generation to the grid or energy supplier.

PPAs are an attractive way to source energy direct from an upstream renewable project and thereby help company’s internal PR/CSR messaging, and are an effective means to reduce wholesale price exposure, avoid expensive T&D costs and lock in energy purchasing requirements for a much longer timeframe (5,10,15,25 years) than is typically available from the wholesale market.

With the accelerated development of large scale electricity storage solutions, it is advisable any PPA entered into by interested parties has storage provisions in the contract for later development.

Demand Side Management

With some commentators now suggesting that there is more money to be made in energy efficiency than in energy supply, there is a clear benefit in enabling your distributed energy consumption (or generating) assets to be demand response (DR)-ready.

In addition to wholesale market cost avoidance from reducing your consumption, NGT, the UK transmission network operator, offers a suite of options for parties interested in participating in demand response, including Triad management, Enhanced Frequency Response and the Capacity Market.

Battery Storage

Electricity battery storage has come to the fore in the last two or so years, and indications are costs are decreasing on a trajectory not dissimilar to the explosion of solar photovoltaic generation in the last 10 years. Estimates are for 2.3 GW of capacity planned capacity to come online in the UK before 2020.

Feed in Tariffs (FiT)

For businesses who have already installed or are thinking about installing onsite small scale renewable energy or micro systems (including CHP) and are looking to take advantage of embedded benefits associated with these systems, ChangingEnergy can advise, support and/or own the Feed in Tariff application process to ensure your business is credited for the output from your assets.

SME Energy Sourcing

It’s not all about non-commodity costs. While lower marginal cost renewable generation might be expected to contribute to a long-term decline in energy wholesale prices, the reality is that market prices remain subject to highly volatile fluctuations during period of system “stress”. While security of baseload supply is unlikely in the coming years, there are increasingly common “flexibility gaps”, with corresponding NGT notices of insufficient margin. Opportunistic generators do take advantage of these periods to offer reserve capacity at expensive prices.

We have seen this during the last winter when, ironically, the UK system was called on to backup lost nuclear capacity in France, resulting in escalating generator bids throughout much of October and early November, ultimately finding their way on to your winter energy bill.

ChangingEnergy can help small businesses navigate these market volatility risks and negotiate a better deal for your energy supply. Contact us for more information.

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